A Southwest Airlines jet leaves Midway Airport on in Chicago, Illinois.
Scott Olson | Getty Images
Both carriers have noted an improvement in travel bookings and plan to increase flying during the peak spring and summer months as more people are vaccinated against Covid-19 and tourist attractions reopen.
American said it is planning to operate second-quarter capacity that’s 20% to 25% less compared with the same quarter of 2019, while Southwest said it will fly only slightly less this June than the same month of 2019 and 15% less in the second quarter over 2019.
American’s shares were up more than 3% premarket and Southwest’s were more than 2% higher.
American Airlines posted a $1.25 billion net loss. The Fort Worth, Texas-based carrier, like its large-carrier rivals Delta and United, has been forced to do without much of the business and international travel revenue airlines have long relied on. American’CEO Doug Parker said business travel demand is starting to show some improvement but is still far below pre-pandemic levels.
American’s first-quarter revenue came in at just over $4 billion, down nearly 53% from the more than $8.5 billion it posted a year earlier and below analysts’ expectations. Adjusting for one-time items, American had a per-share loss of $4.32, a penny more than analysts’ estimates.
“The pandemic is far from over. We have to continue to fight like never before and ensure that when the green flag drops, American is out in front,” Parker and President Robert Isom said in a note to employees. “But as our world makes daily strides in COVID-19 vaccination efforts, customers are returning to travel and there is no doubt the pace of the recovery is accelerating.”
Better demand is helping both carriers trim their cash burn. American had an average daily cash burn of $27 million in the first quarter, which fell to $4 million in March. Southwest, meanwhile, said it expects to get to breakeven core cash flow “or better” by June.
The Dallas-based airline posted first-quarter net income of $116 million, compared with a $94 million loss a year earlier. Its first-quarter profit was the result of more than $1 billion in federal aid that offset its labor costs.
Southwest’s revenue fell to $2.05 billion, down more than 51% from last year and slightly below the $2.07 billion Wall Street analysts were expecting. Southwest posted an adjusted per-share loss of $1.72, less than the $1.85 a share analysts forecast.